SC Commerce uses business donations to supplement recruiting

COLUMBIA, S.C. — Dozens of businesses contribute to a “special events fund” that South Carolina’s economic development agency uses to augment its recruiting efforts, including its successful bid to secure Volvo Cars’ first North American plant.

Commerce Secretary Bobby Hitt said the public-private fund comes in handy when his agency needs to quickly put together a package for selling a prospect on South Carolina, as it allows the agency to avoid the state’s cumbersome purchasing rules.

In the Volvo pitch, for example, the fund paid for a marketing video and three-dimensional image of the potential plant site before state officials’ then-secret trip to Sweden in March, he said.

“We needed to do it on pretty short notice,” Hitt told The Associated Press in a recent interview. “The purchasing process of the state — quickness is not how you’d define it.”

The fund also covered more than $18,300 in airfare to Sweden — supplementing the $16,100 taxpayers spent to send Hitt, Gov. Nikki Haley and three other Commerce officials on the four-day trip, according to the agency.

Two months later, Volvo announced choosing South Carolina over neighboring states, promising 2,000 jobs and a $500 million investment, following Commerce’s pledge of more than $200 million in state incentives.

While the “special events fund” has existed for a quarter century, Hitt retooled it after taking the agency’s helm in 2011 and dubbed it “Palmetto Partners.”

Anita Zucker, CEO of the InterTech Group, said she signed her company up two years ago.

“It’s an investment in our state,” said Zucker, also chair of the Charleston Regional Development Alliance. “To me, as an investor, I want more businesses to come. It’s beneficial for my business when we grow in a planned way.”

InterTech, which has an aerospace subsidiary, is among 20 members giving at the highest level of $100,000-plus over three years.

The bulk of the fund’s 59 contributors are businesses, including utilities, law and engineering firms, construction companies and banks. Donors also consist of state agencies — including Commerce — and local economic development alliances, according to a list from Commerce.

The “partners” are essentially people who make a living from economic development, including those who compete against each other for contracts with Commerce’s clients, Hitt said.

In exchange for donations that fall into one of four levels, members get invited to quarterly financial meetings as well as various special events.

“It gives us access to get in front of more companies,” John Lummus, president of the Upstate SC Alliance, said after Wednesday’s quarterly meeting. “We’re really excited about how the funds are used. It allows the state to go on more trade shows and missions, so in the big picture it helps us.”

Economic development missions supplemented by the fund included last November’s trip to India. The fund provided $10,100, in addition to the $56,100 taxpayers spent directly on the 10-day trip to India, according to Commerce. It was Haley’s first visit to her parents’ native country since she was a toddler.

In 2013, the fund contributed $18,500 toward Haley’s and Hitt’s job-recruiting trip to the International Motor Show in Germany.

In the last three calendar years, Commerce has spent about $2 million from the fund, leaving a balance Dec. 31 of $384,000. Half of that spending went toward Commerce’s “Just Right” branding campaign, according to annual reports.

Hitt said that was his primary reason for reinvigorating the fund.

“If we’re going to create a brand image, I prefer for the private sector to pay for that. Some people may question the value of branding,” said Hitt, adding that his prior job as a BMW executive showed him “brand works.”